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Auditing Challenges in 21st Century America

Auditing in the 21st century is very different than the one prior. The technical aspects have changed so much. Auditors are now responsible for checking not just financial statements but control procedures as well. Exchange rate and international risks are now commonplace. Regulations have increased geometrically. The addition of the IFRS will complicate matters further, for the rest of the world does not share our tradition of conservatism. We need professional researchers to guide the auditors on measuring the significance of the impact of errors so that auditors can effectively allocate their resources.

Diversity and new leadership have a great deal to offer the auditing profession. Different types of cultural experiences help to identify or discount certain inherent risks. Auditors that speak different languages can effectively serve many more companies. Plus younger CPA's were trained in an environment where computers are standard and outsourcing is the norm. The challenge for the AICPA is to help particularly small and medium-sized firms make the political and professional succession easier for the passing of the torch.

There are also significant geographical issues in our changing environment. As older CPA's retire and some partnerships break up or fold, there may be places where there are not enough firms to do all of the required audits. CPA licenses are given by the state chapters and do not cross state boarders. So if a partnership needs to work in a different state, one of their members must get and additional license or the company must partner with another, more local firm. When combined with the auditing requirements of switching firms regularly and enlisting different firms to perform the control environment audit, the financial statement audit, and possibly advisors to the board of directors, there might simply not be e